Summary: Joaquin Sta Marina appointed Barretto as agent/ manager of the

business. Jose took the place of Joaquin upon the latters death. Barretto advised
Joaquin that the former is tendering his resignation on the occasion of the
disappearance of the Chinaman who had failed to pay the company 97k. Barretto
was replaced and now claims 1 years salary and 100k in damages for terminating
services without reason.
SC/Doctrine: plaintiff ostensibly and frankly acknowledged that he had been
negligent in the discharge of his duties and that he had overstepped his authority in
the management of the factory. principal merely exercised his lawful right of
relieving the plaintiff from the position which he had voluntarily given up.
no period whatever was stipulated. it is unquestionable that the defendant, even
without good reasons, could lawfully revoke the power conferred and pay the
plaintiff one month and odd days salary.
ANTONIO M. A. BARRETTO, plaintiff-appellant,
vs.
JOSE SANTA MARINA, defendant-appellee.
TORRES, J.: December 29, 1913
On January 5, 1911, for the plaintiff Antonio M.a Barretto filed suit against Jose
Santa Marina
>defendant, a resident of Spain, was then the owner and proprietor of the business
known as the La Insular Cigar and Cigarette Factory, established in these Islands,
which business consisted in the purchase of leaf tobacco and other raw material, in
the preparation of the same, and in the sale of cigars and cigarettes in large
quantities;
>Plaintiff Barretto held and had held the position of agent of the defendant
in the Philippine Islands for the management of the said business in the name and
for the account of the said defendant;
>plaintiff's services were rendered in pursuance of a contract whereby the
defendant obligated himself in writing to hire the said services for so long a time
as the plaintiff should not show discouragement and to compensate such
services at the rate of P37,000 Philippine currency per annum;
> Jan 1910, the defendant, without reason, justification, or pretext and in violation
of the contract before mentioned, summarily and arbitrarily dispensed with the
plaintiff's services and removed him from the management of the business, since
which date the defendant had refused to pay him the compensation from dec 1909
and that, as a second cause of action based upon the facts aforestated, the plaintiff
had suffered losses and damages in the sum of P100,000 Philippine currency.
counsel therefore prayed that judgment be rendered against the defendant by
sentencing him to pay to the plaintiff P137,000
(note: Joaquin appointed barretto. Joaquin died and replaced by brother, Jose)
special defense: plaintiff had no contract whatever with the defendant in which
any period of time was stipulated during which the former was to render his
services as manager of the La Insular factory;
that the defendant revoked for just cause the power conferred upon the plaintiff;
that subsequent to the revocation of such power, and on the occasion of the
plaintiff's having sold all his rights and interests in the business of the La Insular
factory to the defendant, in consideration of the sum received by him, the plaintiff

renounced all action, intervention and claim that he might have against the
defendant
TC: pay to the plaintiff the salary to which he was entitled for the first eight days of
January, 1910, also that for the following month, at the rate of P3,083.33 per month;
2nd cause of action dismissed
Plaintiff asked for new trial - denied
Upon presentation of the proper bill of exceptions, the same was approved,
certified, and forwarded to the clerk of this court.
The most important fact in this case:
plaintiff Barretto's renunciation or registration of the position he held as
agent and manager of the said factory, which was freely and voluntarily made by
him on the occasion of the insolvency and disappearance of the Chinaman Uy Yan,
who had bought from the factory products aggregating in value the considerable
sum of P97,000 and, without paying this large debt, disappeared and has not been
seen since.
the letter addressed to Jose Santa Marina:
I have always thought that when the manager of a business trips up in a matter
like this he should tender his resignation, and I still think so. The position is at your
disposal to do as you like.
the silence and lack of reply on the part of the chief owner of the factory were
sufficient indications that the resignation had been virtually accepted and that if he
did not reply immediately it was because he intended to act cautiously.
it was to be presumed that he was thereafter looking for some trustworthy person
who might substitute the plaintiff, communicated to the plaintiff that he had
revoked the power conferred upon him and had appointed Mr. J. McGavin to
substitute him, whereby the plaintiff's resignation was expressly accepted.
it cannot be understood that plaintiff has any right to demand an indemnity for
losses and damages particularly since he ostensibly and frankly acknowledged that
he had been negligent in the discharge of his duties and that he had overstepped
his authority in the management of the factory
principal merely exercised his lawful right of relieving the plaintiff from the position
which he had voluntarily given up.
The record does not show that Santa Marina, his principal, required him to resign his
position as manager, but that Barretto himself voluntarily stated by letter to his
principal that, for the reasons therein mentioned, he resigned and placed at the
latter's disposal the position of agent and manager of the La Insular factory;
the plaintiff could not expect, nor ought to have expected, that the defendant
should not have accepted the resignation tendered by the plaintiff in his first letter.
By the mere fact that the defendant remained silent and designated another
person, Mr. J. McGavin, to, discharge in the plaintiff's stead the powers and duties of
agent and manager of the said factory, Barretto should have understood that his
resignation had been accepted
1st cause of action
WON period or term for the duration of the position of agent and manager was fixed
in the verbal contract made between the deceased Joaquin a contract which, after
Joaquin's death was ratified by his brother and heir, the defendant Jose Santa
Marina.
The defendant denied any stipulation therein that Barretto should hold his office for
any specific period of time fixed; neither did he fix the date for the termination of

such services, in the instrument of power of attorney executed by the defendant

Santa Marina
He did no more than accord to the plaintiff the same confidence that the
defendant's predecessor in interest had in him; and so long as this merely
subjective condition of trust lodged in the agent existed, the time during which the
latter might hold his office could be considered indefinite or undetermined, but as
soon as that indespensable condition of a power of attorney disappeared and the
conduct of the agent deceased to inspire confidence, the principal had a right to
revoke the power he had conferred upon his agent, especially when the latter, for
good reasons, gave up the office he was holding.
Article 1733 of the civil Code, according to the provisions of article 2 of the
Code of Commerce, prescribes: "The principal may, at his will, revoke the power
and compel the agent to return the instrument containing the same in which the
authority was given."
Article 279 of the Code of Commerce provides: "The principal may revoke the
commission intrusted to an agent at any stage of the transaction, advising him
thereof, but always being liable for the result of the transactions which took place
before the latter was informed of the revocation.
contract of agency can subsist only so long as the principal has confidence
in his agent, because, from the moment such confidence disappears and although
there be a fixed period for the excercise of the office of agent, a circumstance that
does not appear in the present case the principal has a perfect right to revoke the
power that he had conferred upon the agent owing to the confidence he had in him
and which for sound reasons had ceased to exist.
The record does not show it to have been duly proved that a period was fixed for
holding his agency It would be improper to apply article 1128 of the Civil
Code. This article relates to obligation for which no period has been fixed for their
fulfillment, but, which, from their nature and circumstances, allow the inference that
there was an intention to grant such period to the debtor, wherefore the courts are
authorized to fix the duration of the same,
article 1732 of the Civil Code, agency is terminated:
1. By revocation.
2. By withdrawal of the agent.
3. By death, interdiction, bankruptcy, or insolvency of the principal or of the agent.
It is not incumbent upon the courts to fix the period during which
contracts for services shall last. Their duration is understood to be implicity
fixed, in default of express stipulation, by the period for the payment of the salary of
the employee. Therefore the doctrine of the tacit renewal of leases of property,
established in article 1566 of the Civil Code, is not applicable to the case at bar.
And even though the annual salary fixed, the custom universally observed, salaries
fixed for the year are collected and paid in monthly installments. he would at most
be entitled to the salary for one month and some odd days
Article 302 of the Code of Commerce :
In cases in which no special time is fixed in the contracts of service, any one of the
parties thereto may dissolve it, advising the other party thereof one month in
advance.
The factor or shop clerk shall be entitled, in such case, to the salary due for one
month.
From the mere fact that the principal no longer had confidence in the
agent, he is entitled to withdraw it and to revoke the power he conferred

upon the latter, even before the expiration of the period of the
engagement or of the agreement made between them;
CAB: no period whatever was stipulated. it is unquestionable that the defendant,
even without good reasons, could lawfully revoke the power conferred and pay the
plaintiff one month and odd days salary.
Barretto had exceeded his authority and acted negligently in selling on credit to the
said Chinaman (P97,000); the loan contracted by the agent Barretto, without the
approval of the principal, caused a great panic among the stockholders of the
factory. even omitting consideration of the resignation before mentioned, we find
duly warranted the reasons which impelled the defendant to revoke the said power
and relieve the plaintiff from the position of agent and manager of the La Insular
factory.
article 283 of the Code of Commerce, the manager of an enterprise or
manufacturing or commercial establishment, authorized to administer it and direct
it, with more or less powers, as the owner may have considered advisable, shall
have the legal qualifications of an agent.
Article 300 of the same code prescribes: "The following shall be special reasons
for which principals may discharge their employees, even though the time of
service of the contract has not elapsed: Fraud or breach of trust in the business
intrusted to them . . . "
2nd cause of action
the record does not show that the plaintiff has any good reason or legal ground
upon which to claim an indemnity for losses and damages in the sum of P100,000,
for it was not proved that he suffered to that extent, and the judgment appealed
from has awarded him the month's salary to which he is entitled.